In the 1990s, the government created a new program for foreign investors to put money into American real estate in exchange for the opportunity to live in the country. The program intended the funds to go to communities desperately in need of affordable housing. Now the program is subsidizing luxury developments across the country.
For example, the Hudson Yards development in New York City, which features 16 skyscrapers and costing $25 billion is one of the greatest beneficiaries of the EB-5 immigration program. Related, the developer, raised $600 million in its first phase through EB-5; a second phase is also targeting another $600 million.
Here’s how EB-5 works: Foreigners who invest between $500,000 and $1 million in projects that create U.S.-based jobs are allowed to apply for permanent resident status for themselves and their families. Visa petitioners can invest the lower amount if they finance projects in rural or economically distressed areas. The idea behind the program is to help spur job-creation in places that desperately need investment.
Plainly, Hudson Yards is nobody’s idea of disadvantaged: The median price for a condo north of 20th Street near the High Line is $6 million. And yet it qualified for the underdog deal.